What do you think of this transfer idea?

iVillage Member
Registered: 03-26-2006
What do you think of this transfer idea?
2
Sun, 04-02-2006 - 1:59pm

Hello all!

Quick question on how to best hit my highest interest rate debt first -

I have $8,000 on a Chase credit card at 4.99% for the life of the loan, and about $18,000 on a Citibank card with half at 2.99% and half at 17% (ouch!). I just paid off a BofA card, so the balance is 0. The BofA card has offered a transfer deal at 3.99% til December 2006. Since I know that Citibank will make me pay off the 2.99% balance before tackling the higher interest balance, I was thinking I could transfer half to the BofA card (3.99% til December) and just throw all my money (about $2,000 a month) for the next 7 months at the 17.99 Citibank balance. Citibank is great at sending out transfer offers so once December hits, and that card is at 0, I can transfer back the balance from BofA (before it goes up to 20%). What do you think? Trying to be creative here to get lower balances.

Thanks!

Avatar for endomagazine
iVillage Member
Registered: 11-09-2004
Sun, 04-02-2006 - 5:45pm

Hello Chloe,


I would suggest paying off the smallest balance first. Sure, you may lose a little in interest, but you'll have more "snowball" to toss at the higher balance when you've paid off the smaller one. I wouldn't do a balance transfer unless you were offered a zero percent rate.


If you can get *all* of the 2.99% rate balance off of the Citibank card in one balance transfer, then your minimum paymenets to Citibank would be paying off that high interest rate quickly.


Have you considered calling Citibank and asking them to lower the interest rate? If you have a history of on-time payments, often you can get a 1-3% decrease just by asking. Then you could mention the balance transfer offer from BoFA and ask if they could match it on the higher interest rate

Sincerely,
Lindsey Schocke

Geeks on Tap: Mission Accomplished

iVillage Member
Registered: 12-05-2004
Sun, 04-02-2006 - 6:19pm

I'm not an expert on balance transfers, but it sure sounds like this might be a good idea. Lowering your balance on the 17.99% card so you can pay it off completely and then maybe later transfer another balance to it when they offer you a good APR deal, is a good idea in my book. :-D

Pat :-D